Global markets reacted positively to strong US manufacturing data despite soft retail sales numbers. The ISM Purchasing Managers’ Index (PMI) rose to 55.3 against a consensus of 54.5, which was a surprisingly good news for markets plagued by the fear of slowdown. Along with growth in manufacturing sector in China, improvement in investor sentiment could add further pressure to bullion.
On the technical side, the precious metal is sliding towards the daily support of 1280. Should it break the next level of defence would be 1277. 1297 is the immediate resistance on the upside.
The sentiment-price correlation chart shows the sentiment dipping into the negative territory. Daily news sentiment is moving higher and in 80% of the last 10 occurrences price has risen within 8 days.